O’Farrell keeps electricity options open

NSW Premier
Barry O’Farrell
failed to rule out full privatisation of the state electricity sector on the same day as a commission of inquiry into the former Labor government’s $5.3 billion sale of state-owned electricity assets called for submissions before official hearings get under way.

The Special Commission of Inquiry into Electricity Transactions met briefly yesterday morning as special commissioner Brian Tamberlin, QC, read out the broad terms of reference and called for submissions.

The commission, ordered by Mr O’Farrell, has been set up to investigate the controversial sale, which has been criticised for not delivering value for taxpayers and was completed shortly before the March state election.

“The terms of reference are very wide," Mr Tamberlin said, adding that the committee will investigate the “compliance of relevant laws, policies and purchases" of the sales late last year.

The terms of reference include consideration of “the value for money achieved for the state compared to the retention value of the assets of the state", and “the costs and benefits to the state of the electricity transactions, including potential risks and liabilities and the extent to which the transactions can deliver the stated objectives for entering into them."

Mr Tamberlin has also been asked to report on options for future actions that could further the public interest in a competitive NSW electricity sector and “promote competitive electricity prices and ensure reliability of supply".

The commission is expecting a submission from the Department of Premier and Cabinet.

Mr O’Farrell said yesterday he would await the inquiry’s findings before deciding whether to privatise the remainder of the state’s electricity assets.

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“We want this commission of inquiry to get to the bottom of the power sell-off that occurred before Christmas, to let us know precisely what that means for the state, but secondly, to set the future course for the state's electricity industry, having in mind the need to keep power prices as low as possible."

Electricity and gas company TRUenergy, which was involved in the deal, is yet to decide on whether it will make a submission to the inquiry.

Investment bank Credit Suisse, an adviser on the sale, is unlikely to make a substantive submission to the inquiry.

Mr Tamberlin adjourned the inquiry yesterday until the commission had read the submissions.

Origin Energy
paid $3.25 billion for Country Energy, Integral Energy and the Eraring gentrader contract. TRUenergy paid $2.04 billion for the state’s biggest retailer, Energy Australia, the Delta West gentrader contract and two Marulan development sites. It paid an additional $240 million for capital improvement at the Wallerawang power station.

Former treasurer Eric Roozendaal appointed four new directors to Eraring and Delta – former minister Kim Yeadon, Michael Lilley, John Dermody and Jan McClelland – hours before the sale was finalised after eight directors resigned in protest over the deal.